F.C. Kingston Sues Kingtech – A Company Started By Former Employees – For Trademark Infringement, Unfair Competition, and Trade Secret Misappropriation

Los Angeles, CA – Trademark attorneys for F.C. Kingston LLC and Storm Manufacturing Group, Inc. (“Kingston”) filed a trademark infringement, unfair competition, and trade secret misappropriation complaint, at the Central District of California (Los Angeles Division), against Kingtech LLC – a company operated by Daniel Marshall and Reed Ferguson, two former Kingston employees. Kingston designs and manufactures “metal valves and custom fittings serving many industries including compressed air, floor cleaning, automotive, medical/dental, industrial flow control, and food service.” Since 1908, Kingston has used the “Kingston” trademark and has obtained a USPTO trademark registration. And starting in 1970 it began stamping its products with a “K” in a circle mark, a trademark application for which is currently pending at the USPTO.

Kingston alleges that Marshall was hired in 2000 as a Quality Engineer and became a Senior Brand Manager in 2005, where, through his job duties, “Marshall had a close relationship with all of Kingston’s suppliers and customers, and was intimately familiar with all of Kingston’s suppliers and customers, and was intimately familiar with the branding of Kingston’s goods and its extensive use of the Kingston Marks.” Plaintiff alleges that Ferguson was hired in 2005 as the national sales manager and worked closely with Marshall “regarding customer acquisition, pricing, promotion, new product development and target market selection.” Both Marshall and Ferguson signed employment agreements in which they agreed that they would not disclose Kingston’s “confidential or proprietary information, including information concerning customer lists, pricing, drawings, and marketing data.” Marshall was allegedly terminated in January of 2008 and Ferguson resigned last June.

Kingston alleges that a few months before resigning, Ferguson asked for and received an Excel spreadsheet providing detailed information about every sale that Kingston had made in the past five years. “Such a compilation of information is obviously not available to the public, and permits its user to know not only who every one of Kingston’s almost 2,000 customers are, but exactly what they have ordered, when they ordered it, and the precise price paid…Ferguson then proceeded to email the entire spreadsheet from his work email account to his personal email account.” The complaint alleges that Ferguson shared the stolen spread sheet with Marshall, who had set up the competing Kingtech business.

A Kingston employee discovered some of the Kingtech products at its customer’s location and later discovered Marshall and Ferguson promoting Kingtech products at an industry tradeshow. “In addition to using a confusingly similar company name, Kingtech stamps its products with a logo that is virtually identical to the Kingston Logo, namely, a circle containing the capital letter ‘K’ with a significantly smaller subscript letter ‘T’.” The complaint provides the following side by side comparison of the parties’ respective products:

The complaint’s allegations of misconduct do not end there: “To further confuse the market, Kingtech assigned product numbers to its valve products that were nearly identical to the corresponding Kingston valves. For example, Kingtech’s ‘K251-30’ valve was nearly identical to Kingston’s ‘251-30′ valve in form and appearance.” Further, the complaint continues, “Kingtech has also attempted to misappropriate Kingston’s goodwill by slavishly copying non-functional design elements that are unique to Kingston’s products.” Like an infomercial, the complaint has MORE: “further indicative of Kingtech’s bad faith, and in direct violation of the Lanham Act, Kingtech, on multiple occasions, even displayed Kingston’s actual valves on Kingtech’s website.” But wait, there’s even more: “Kingtech has actively sought out and employed Kingston’s production factories in China to produce its essentially identical products bearing the Infringing Marks,” despite Defendants’ knowledge of the Plaintiff’s exclusive distribution agreement with the Chinese factories, which agreement was allegedly negotiated and consummated by Defendant Marshall.” ORDER NOW! Shipping and handling extra. The case is titled F.C. Kingston LLC v. Kingtech LLC et al., CV 08-07904 VBF (C.D. Cal. 2008).